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Criteo SA v. Unique USA, Inc.

United States District Court, D. South Carolina, Rock Hill Division

July 18, 2019

Criteo SA, Plaintiff,
v.
Unique USA, Inc., Defendant.

          ORDER AND OPINION

         Plaintiff Criteo SA (“Criteo”) brings this action seeking overdue payments arising from the advertising and marketing services that it provided to Unique. (ECF No. 1-1.)

         This matter is before the court pursuant to Defendant Unique USA, Inc.'s (“Unique”) Motion to Dismiss and Answer under Rule 12 of the Federal Rules of Civil Procedure. (ECF No. 4.) For the reasons set forth below, the court DENIES Unique's Motion to Dismiss and Answer (ECF No. 4) without prejudice.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         On September 14, 2018, Criteo, a corporation duly incorporated within the state of Delaware, filed this action against Unique, a South Carolina limited-liability company with principal offices and agents in York, South Carolina. (ECF No. 1-1 at 2.) Criteo is a global company that specializes in digital advertising and marketing. Criteo SA (CRTO.O) Company Profile, Reuters, https://www.reuters.com/finance/stocks/company-profile/CRTO.O (last visited June 27, 2019).[1] Unique is a “supplier of floor coverings” that “ships tens of thousands of rugs worldwide every month.” Unique USA Inc., LinkedIn, https://www.linkedin.com/company/ unique-usa-inc./about/ (last visited June 27, 2019). See also Unique USA, Inc. Company Profile, Bloomberg, https://www.bloomberg.com/profile/company/1442274D:US (last visited June 27, 2019).

         Criteo's Complaint alleges Unique agreed to purchase digital marketing services from it, and “on September 8, 2014[, ] executed and delivered to [Criteo] the Universal Insertion Order for the United States.”[2] (ECF No. 1-1 at 2-3.) According to the Complaint, on December 15, 2014, Unique executed and delivered to Criteo the Universal Insertion Orders (“UIOs”) from Switzerland, Canada, the United Kingdom, and Australia. (Id. at 3.) Criteo claims that it provided the digital marketing and/or advertising services for Unique, under the terms the parties agreed upon within the UIO, and alleges Unique has failed to pay a due and outstanding balance of $1, 025, 208.40, despite demands for payment of the outstanding balance.[3] (Id. at 3-4.)

         On October 25, 2018, Unique filed its Notice of Removal removing this case from the York County (South Carolina) Court of Common Pleas to the United States District Court for the District of South Carolina, on the basis of diversity jurisdiction, pursuant to Fed.R.Civ.P. 81(c) and 28 U.S.C. § 1332. (ECF No. 1.) On the same date, Unique filed its Motion to Dismiss and Answer, in which Unique moves to dismiss the action pursuant to S.C. Code Ann. § 33-15-102(a) (West 2019), arguing that Criteo “has not complied with the statutory requirements for bringing a lawsuit in South Carolina.” (ECF No. 4 at 1.) Further, Unique moves to stay this action until the court receives timely proof that Criteo “has been legally authorized to do business in South Carolina.” (Id.)

         In Criteo's Response to the Motion to Dismiss, filed on November 29, 2018, Criteo argues that Unique's Motion should be denied, stating that “it is not necessary or required that it obtain authorization to do business in South Carolina in order to proceed with suit here to recover an unpaid account from a business located in this State.” (ECF No. 8 at 1.) Further, Criteo claims that it “does not transact business in South Carolina within the meaning of section 33-15-101, ” and that because it “maintains no offices, employees, or place of business in South Carolina, ” and its activities involving South Carolina are “incident to its interstate commerce transactions, ” Criteo is not required by §§ 33-15-101 and 33-15-102 to obtain a certificate of authority before bringing an action in South Carolina. (ECF No. 8 at 1 (citing S.C. Code. Ann. §§ 33-15-101, 33-15-102).)

         In Unique's Reply to Criteo's Response, filed on December 6, 2018, Unique argues that the “legislative intent must prevail.” (ECF No. 9 at 1 (citing Smith v. Tiffany, 799 S.E.2d 479 (S.C. 2017)).) Unique continues to claim that S.C. Code Ann. § 33-15-102 prevents Criteo from accessing the courts of South Carolina because Criteo is not licensed to do business in the state. (Id.) Additionally, Unique asserts that Criteo is prohibited from transacting business in South Carolina “until it obtains a certificate of authority from the Secretary of State, ” and that none of the exceptions to the applicable statute apply to Criteo. (Id. at 2 (quoting S.C. Code Ann. § 33-15- 101(a))). See also S.C. Code Ann. § 33-15-101(b). Further, Unique contends that “South Carolina certainly has an interest in not opening its courts, paid for with state revenue generated from South Carolina citizens, to foreign corporations who have not paid relevant fees and taxes to enable those foreign corporations to avail themselves of the courts of this State.” (Id. (citing Triplett v. R. M. Wade & Co., 200 S.E.2d 375 (S.C. 1973)).)

         II. LEGAL STANDARD

         A. Motions to Dismiss Under Fed. R. Civ. 12(b)(6)

         When a party files a motion to dismiss contemporaneously with its answer, federal district courts should treat the motion to dismiss as seeking a judgment on the pleadings pursuant to Fed.R.Civ.P. 12(c), rather than as a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6). See Walter v. Kelly, 589 F.3d 127, 139 (4th Cir. 2009). “A motion for judgment on the pleadings made pursuant to Rule 12(c) is decided under the same standard as a motion to dismiss made pursuant to Rule 12(b)(6) with the sole difference being that the court is to consider the answer in addition to the complaint.” L. Foster Consulting, LLC v. XL Grp., Inc., No. 3:llcv800(REP), 2012 WL 2785904, at *3 (E.D. Va. 2012) (citing Walter, 589 F.3d at 139).

         A motion to dismiss pursuant to Fed. R. Civ. P 12(b)(6) for failure to state a claim upon which relief can be granted “challenges the legal sufficiency of a complaint.” Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir. 2009) (citing Jordan v. Alt. Res. Corp., 458 F.3d 332, 338 (4th Cir. 2006)). For a complaint to survive a motion to dismiss for its failure to state a claim, the Federal Rules of Civil Procedure require that it contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). “In evaluating a motion to dismiss, a plaintiff's well-pleaded allegations are taken as true, and the complaint, including all reasonable inferences therefrom, is liberally construed in the plaintiff's favor.” McMurray v. LRJ Restaurants, Inc., No. 4:10-cv-01435-JMC, 2011 WL 247906, at *1 (D.S.C. Jan. 26, 2011) (citing McNair v. Lend Lease Trucks, Inc., 95 F.3d 325, 327 (4th Cir. 1996)).

         B. Foreign Corporations in South Carolina

         Under S.C. Code Ann. § 33-15-101(a), “a foreign corporation may not transact business in [South Carolina] until it obtains a certificate of authority from the Secretary of State.” Subsection (b) of S.C. Code Ann. § 33-15-101 provides a non-exhaustive list of activities that “do not constitute transacting business within the meaning of subsection (a).”[4] “A foreign corporation transacting business in [South Carolina] without a certificate of authority may not maintain a proceeding in any court in [South Carolina] until it obtains a certificate of authority.” S.C. Code Ann. § 33-15-102(a). Lastly, the statute states that “a court may stay a proceeding commenced by a ...


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